Challenge to Denial of HPD Relocation Assistance to Tenants in Unlawful Dwelling Units

Smith v. Donovan, Index No. 400163/08 (Sup. Ct. N.Y. Co.)

Nature of Claims: This action challenges New York City Department of Housing Preservation and Development's unwritten policy of denying relocation assistance to tenants in unlawful dwelling units.

Background: New York City's Administrative Code Section 26-301 provides that a tenant in a privately owned building, subject to a vacate order, is entitled to relocation assistance. The Petitioners in this action are thirteen men who lived in a two-family house. The house had been marketed to the petitioners as a “3/4 house” that would provide them services and enable them to locate more permanent housing. The petitioners entered into rental agreements, paid rent, and lived in the premises for various time periods between one and nine months when HPD issued a vacate order on the building. HPD denied petitioners relocation assistance because the two-family house was an illegal multiple dwelling. Petitioners challenged this interpretation as being contrary to the plain meaning of the statute.

Current Status: In April 2009, the Appellate Division, First Department, sustained the petitioner's position. The Appellate Division held that HPD's interpretation of the Administrative Code was contrary to the plain meaning of the statute. Additionally the Appellate Division found that petitioners were tenants and thus were entitled to relocation services. On November 23, 2009, the Court of Appeals denied the City’s motion for leave to appeal.

Reported Decisions: Smith v. Donovan, 61 A.D.3d 505, 878 N.Y.S.2d 675 (1st Dep’t 2009), leave to app. denied, 2009 WL 4016835 (N.Y. Nov. 23, 2009)